4 U.S. IPOs Planned For The Week Of Aug 11

There are four initial public offerings on the calendar this week as the IPO market slows down during an annual three-week pause. Turbulence in broader indices has pressured IPOs; about one third of expected IPOs were delayed or postponed in each of the past two weeks. Completed deals continue to pressure proposed valuations, with 41% pricing below the range. This week could see two biotechs and two financial firms go public, including two holdovers from last week.

Two biotechs: one early stage, one late stageLast week, ear biotech Auris Medical (NASDAQ:EARS) priced 46% below its midpoint and gained just 1%. Either new drugs for ear disorders are unpopular, or investors were waiting for this week's Otonomy (NASDAQ:OTIC) IPO. Insiders plan to buy 25% of the $80 million IPO, and include Avalon Ventures, Domain Associates, TPG, OrbiMed and Novo A/S. The company has completed Phase 3 trials for its lead candidate, but profitability is still years out.

Zosano (NASDAQ:ZSAN), an early stage biotech developing transdermal patches to treat osteoporosis, is expected to raise $70 million after it delayed its IPO last week. Earlier this year, osteoporosis biotech Radius Health priced 47% below the midpoint and has traded up 47% since its IPO, while transdermal patch maker Corium International (NASDAQ:CORI) priced 27% below the range and traded down 28%.

Two financial IPOs: a Florida bank and a life insurance holderFlorida bank C1 Financial (BNK-OLD) is expected to raise $50 million, but must overcome poor trading by other bank IPOs this year. Fellow Florida-based bank FCB Financial, which went public two weeks ago, is the second-worst performing bank IPO of the year (out of 8), down 2% from its offer price. ServisFirst (NASDAQ:SFBS), which also has a major presence in Florida, has done the worst, trading 6% below its IPO price.

As a policyholder of purchased life insurance, GWG Holdings (NASDAQ:GWGH) posts a profit based on how many of its claims "mature," but could face challenges if life expectancy rises faster than expected. The company expects to raise $20 million to invest in additional policies.

C1 Financial (BNK-OLD), a Florida commercial bank with 29 locations and $1.4 billion in assets, plans to raise $50 million by offering 2.6 million shares at a price range of $18 to $20. At the midpoint of the proposed range, C1 would command a market value of $303 million. C1 Financial, which was founded in 1995, booked $75 million in net interest and noninterest income over the last 12 months. The St. Petersburg, FL-based company plans to list on the NYSE under the symbol BNK. Keefe Bruyette Woods and Raymond James are the joint bookrunners on the deal.

GWG Holdings (GWGH), which holds a portfolio of life insurance policies worth over $250 million, plans to raise $20 million by offering 1.6 million shares at a price range of $11.50 to $13.50. At the midpoint of the proposed range, GWG would command a market value of $112 million. GWG Holdings, which was founded in 2006, booked $30 million in sales over the last 12 months. The Minneapolis, MN-based company plans to list on the NASDAQ under the symbol GWGH. MLV & Co. is the lead bookrunner on the deal.

Otonomy (OTIC), a late-stage biotech developing sustained-exposure treatments for ear diseases, plans to raise $80 million by offering 5.3 million shares at a price range of $14 to $16. At the midpoint of the proposed range, Otonomy would command a market value of $315 million. The San Diego, CA-based company, which was founded in 2008, plans to list on the NASDAQ under the symbol OTIC. J.P. Morgan and BofA Merrill Lynch are the joint bookrunners on the deal.

Zosano Pharma (ZSAN), a biotech developing a transdermal delivery system to treat osteoporosis, plans to raise $70 million by offering 6.4 million shares at a price range of $10 to $12. At the midpoint of the proposed range, Zosano would command a market value of $139 million. Zosano Pharma, which was founded in 2007, booked $3 million in licensing agreements over the last 12 months. The Fremont, CA-based company plans to list on the NASDAQ under the symbol ZSAN. Wedbush PacGrow, Ladenburg Thalmann & Co. and Roth Capital are the joint bookrunners on the deal.

IPO market snapshotSo far this year, 188 IPOs have raised $40.5 billion and produced an average total return of 10%. Since the beginning of the third quarter, 41 offerings have averaged 11% on the first day and 0.3% in post-IPO trading; respective performance levels in between IPOs in the first and second quarter.

This year, the Renaissance IPO ETF (NYSEARCA:IPO), a float cap-weighted basket of newly public companies and indicator of post-IPO performance, has gained 0.9% compared with 4.5% for the S&P 500. Over the last 30 days, the IPO ETF has fallen 1% compared with -1.6% for the S&P 500. The active IPO pipeline includes 137 companies looking to raise a total of $51.4 billion.